A low-cost and verifiable sealed bid auction protocol based on smart contracts

Abstract

Sealed-bid auctions are a widely used transaction method in today’s society. The traditional implementation scheme relies too much on third-party platforms, and there are severe problems in the auction protocol’s security and users’ privacy protection. At present, some sealed bid auction schemes based on blockchain technology have been proposed, but these schemes generally do not consider the storage cost of users. We propose a sealed-bid auction protocol based on Ethereum smart contracts that remove third parties in traditional protocols to address these issues. We have significantly reduced the storage cost of users by introducing the Interplanetary File System (IPFS). In particular, we use a commitment mechanism to protect bid privacy and combine it with a zero-knowledge proof algorithm to achieve publicly verifiable bidders, guaranteeing the protocol’s security, privacy, and transaction fairness. The experimental results show that the proposed sealed bid auction protocol can reduce the storage cost of users in Ethereum while ensuring the security of the protocol and the privacy of users’ bids.